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In April 2020, a kid named Alex Masmej hit the headlines for launching a "human IPO". He wanted to pull money from his home in Paris to Silicon Valley, where he planned to start a decentralized finance startup. Masmej convinced 29 people to spend a total of $ 20,000 on a cryptocurrency he created for himself. He called it $ ALEX.
Confession: His experiment opened my eyes, not just to the potential of Creator Coins, but much more – a radical and fairer mindset about the internet.
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Though cryptocurrency markets have taken a hit lately, Creator Coins – a subset of cryptocurrency that fans can use to buy unique tokens from their favorite creators – are intended for a deeper audience than would-be day traders. They give YouTubers a new way to get paid and give fans a chance to get something in return, such as: E.g. early access to an album, meet-and-greet, or digital currency that can grow in value. They are the opposite of platforms like Facebook, Twitter and YouTube – monoliths that exploit the creativity and data of users, benefit immensely and offer little in return.
In their democratization of access, wealth and authority, social tokens are the harbingers of a fairer Internet: Web 3.0.
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Web 2.0 has commodified us
Let's take it back to the golden old days. The first website ever was a static page that explained the mission of the World Wide Web: "To provide universal access to a large universe of documents". That was in 1991, and people were puzzled by this abstract idea of a place that only existed on computers. That was Web 1.0.
As the internet became widely accessible, people started thinking about ways to make it interactive. It wasn't long before Myspace, Facebook, Twitter and others changed the way we saw the internet. It changed from a cache of documents to a world that allowed people to create and share content. That is Web 2.0 in a nutshell.
It grew incredibly big, incredibly fast, often to the detriment of its users. In particular, the content creators – the people who create the catchy videos, memes, graphics, and updates that are the lifeblood of social networks – are treated like pawns even though they are the ones who drive engagement on these platforms.
One of the things I'm looking forward to the most? Restore power to creators and expand the possibilities of monetization even further – to their followers.
You adhere to the behavior, ownership and monetization rules of the platforms. If the algorithm of a platform changes, creators can get stuck. We have seen Facebook wipe out organic reach for small businesses to force them to pay for advertising. We saw it with YouTube squeezing out original content for music videos and TV clips.
The good news is that the Internet is constantly evolving and Web 3.0 solutions to these problems are already in bloom. One of the things I'm looking forward to the most? Restore power to creators and expand the possibilities of monetization even further – to their followers.
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We are in charge in Web 3.0
Just as the virtual world was difficult to understand in 1991, ideas like creator coins can be difficult to conceptualize right now, especially since we are still defining the terms. But let's think of them as creator coins – a digital piece of your favorite creator that you can invest in without having to pay middlemen.
There are sometimes benefits to this intimate approach – early access to albums or a say on the creator's next project. There is a scarcity built into these coins and that puts power in the hands of those who own them. With resale markets popping up on the left, right, and center, fans can make real money here.
One such market, Bitclout, made the most of the headlines. Its founder took the top 15,000 accounts on Twitter and created coins for each of them without permission. The owners of these accounts have the option to back their platform to claim 10% of the bitcoins that are pumped in by ordinary people who can buy and sell these coins on the Bitclout platform just like they would with stocks on an exchange would do.
The way people behave will, in theory, affect the price of their coin, and the first great creators to endorse their coins could see huge price spikes as the platform gains legitimacy. Other platforms like Rally use similar ideas but with a less controversial approach and have had tremendous results.
The best part? These platforms are all based on blockchain technology with the aim of being trustworthy, which means that none of the parties involved have to trust others. This will better protect your data and your money by reducing the opportunities for hackers or regulators to intervene. It gives creators more choices when it comes to monetization and gives users the chance to get a real return on their investment – slightly more rewarding than blank likes. It's a Web 3.0 solution for the lazy areas of older social platforms.
Normalize Creator Coins
Do you remember Masmej? The kid who took a chance last year launched their own web 3.0 social platform. It expands the idea of social tokens and non-fungible tokens (NFTs) and creates an interactive space for people to create, buy, and trade. It's a space where a conglomerate like Facebook doesn't decide who gets promoted, who gets buried, and how people get paid. His goal? "Give every YouTuber the same chance behind $ ALEX." Earlier this year, he raised $ 7.6 million for his idea.
The idea of a social sign can trigger a visceral response in people. It seems confusing. It appears to be fake. Something like Bitclout might even feel like a Black Mirror episode – where your personality and social status have a number, and people act on you based on that number. There is certainly still a lot of work going on in this area. Seeing something like $ ALEX reminded me of being on the ground floor of Web 1.0 in the 90s, when few people got into ideas like online dating or gambling.
It's happening again, but this time the result will be a fairer internet for everyone.
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